Campaign Finance in the Presidential Election of 1940

Louise Overacker

The American Political Science Review, Vol. 35, No. 4. (Aug., 1941), pp. 701-727.

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 AMERICAN GOVERNMENT AND POLITICS
Campaign Finance in the Presidential Election of 1940.l Important
changes in the regulations governing receipts and expenditures of party
committees, enacted in the summer of 1940, make a study of the financing
of the presidential election of that year particularly interesting and signifi-
cant. "Hatch Act 11," designed primarily to extend to certain state and
local employees limitations upon political activities already imposed upon
federal office-holders by "Hatch Act I," introduced a number of radical
changes in the rules governing the collection of campaign funds2
Section 21 of the act made i t illegal for any "political committee" to
receive contributions or make expenditures, during any calendar year,
aggregating more than $3,000,000.3 Section 13 limited to $5,000, in any
calendar year, contributions of persons or associations to any campaign
"for nomination or election, to or on behalf of, any candidate for an elec-
tive federal office (including the offices of President of the United States
and presidential and vice presidential electors)," with the stipulation,
however, that such limitations should not apply to contributions to state
or local committees. The same section, in sub-section (c), also declared it
unlawful for any person or corporation to purchase "goods, commodities,
advertising, or articles of any kind or description," where the proceeds of
such purchase would benefit the candidates for federal elective office-a
provision obviously aimed a t the famous convention book which was an
important source of revenue to the Democratic National Committee in
1936.4
State attempts to meet the problem of the "power of the purse" by
imposing flat limitations upon the size of contributions and the total ex-
penditures of candidates or party committees in elections are no novelty:
and the amount which candidates for senator and representative in Con-
% This study was made possible by a research grant from Wellesley College,

which the writer acknowledges with grateful appreciation. She wishes also t o take
this opportunity to thank officers of the Democratic and Republican national com-
mittees, members of the staff of the Gillette Committee, and the clerk of the House
of Representatives for the many courtesies extended t o her in the preparation of
this article.
The first Hatch Act, Public Law No. 252, 76th Congress, was approved August
2, 1939. The second, Public Law No. 753, approved July 19, 1940, was in the form
of a n amendment t o the earlier act. The provisions of these two acts, together with
the Federal Corrupt Practices Act of 1925, are published in convenient pamphlet
form under the title "Political Activities and Federal Corrupt Practices Acts," as
Sen. Doc. No. 264, 76th Cong., 3d Sess.
According t o Section 302(c) of the Federal Corrupt Practices Act, a "political
committee" is "any committee which accepts contributions or makes expendi-
tures for the purpose of influencing the election of candidates ... in two or more
. ."
states. . ' The venture netted the committee about $250,000.
See discussion in the writer's Money i n Elections, pp. 308-12, 43-48.
702 THE AMERICAN POLITICAL SCIENCE REVIEW

gress may spend, except for designated purposes, has been limited since
1911. But the 1940 act marked the first attempt to limit either the amount
that an individual might contribute to a national committee or the total
expenditures of such an agency. Some idea of how drastic these limitations
are becomes apparent when one remembers that John J. Raskob contrib-
uted $110,000 to the Democratic National Committee in 1928, that in
1936 William Randolph Hearst and John D. Rockefeller, Jr., each con-
tributed $50,000 to the Republican National Committee, that in 1928
Democratic expenditures exceeded $5,000,000, and that more than
$8,000,000 was expended by the Republicans in 1936. I n analyzing the
1940 campaign funds, attention has been focussed upon the effect of the
Hatch Act limitations. Are these provisions effective as they stand? Should
they be strengthened? Should they be continued as they are? Should
they be repealed? These are the questions which have been uppermost
in the writer's mind in undertaking this study.
Fortunately for the investigator, the regular reports filed by treasurers
of party committees were supplemented by information assembled by a
Senate committee and by a special grand jury. Following its usual practice,
the Senate appointed a special committee to investigate presidential, vice
presidential, and senatorial campaign expenditure^.^ This committee,
under the chairmanship of Senator Guy M. Gillette of Iowa, displayed a
commendable effort to avoid the political pyrotechnics and partisan tend-
encies that have characterized some of its predecessors. On the other
hand, its members seemed to lack the fundamental interest in problems of
campaign finance which characterized the work of such crusaders as James
A. Reed, William E. B,orah, and Gerald Nye. I t limited its investigations
rather narrowly to complaints brought by others, and it was obviously
handicapped by dissension within its own ranks17a,nd by the fact that its
chairman was forced to give a good deal of attention and energy to the
"Lend-Lease" bill hearings before the Committee on Foreign Relations
just a t the time that the report on campaign funds was being prepared.
I n its report, the committee proposes no specific legislation, but limits
itself to recommending "exploration and study by the United States
Senate of remedial legislation" designed to accomplish certain enumer-
ated objectives and suggests that the Senate Committee on Privileges and
Elections "make a thorough study of the situation with a view of propos-
ing any amendments to existing law which may be deemed by that com-
mittee to be in the public i n t e r e ~ t . "Nevertheless,
~ the information as-
Senate Resolutions 212, 291, and 336, 76th Cong., 3d sess., and Senate Resolu-
tion 59, 77th Cong., 1st Sess.; appointed Feb. 1, 1940.
Note Senator Tobey's "minority views" and "supplemental reports," and
Senator Adams' statement.
United States Senate Special Committee t o Investigate Presidential, Vice
Presidential, and Senatorial Campaign Expenditures, 1940, Report No. 47 (77th
 AMERICAN GOVERNMENT AND POLITICS 703

sembled by an unusually able corps of assistants is an invaluable source

of material for anyone wishing to probe into the effects of the Hatch Act.
Particularly useful is the compilation of expenditures of state and local
committees, which are not required to file reports a t Washington; the
investigation of the activities of the various Republican finance commit-
tees; and the tabulation of contributions by prominent individuals and
fa mi lie^.^ Without this data, the picture of the financing of the campaign
would be incomplete indeed.
A different, but equally important service, was rendered by the special
investigation conducted by Maurice M. Milligan, special assistant to the
Attorney General. Although the special grand jury convened to hear the
evidence presented by Mr. Milligan brought in no indictments, the in-
vestigations were the basis for sweeping condemnations of the wording
of the present law, and specific, constructive proposals for remedial legis-
lation. It is in itself a sign of progress that the Department of Justice
should have displayed this interest in the enforcement provisions of the
corrupt practices legislation. Mr. Milligan's recommendations will be con-
sidered later.
Both parties had ended the campaign of 1936 in debt, the net deficit of
the Democratic National Committee being $445,000, that of the Republi-
cans, $915,000.10 During the following three years, both headquarters
maintained active organizations and raised substantial sums, as Table I
shows. More than one-third of all that the Democrats raised during this
period came from Jackson Day dinners and late sales of the famous
Book of the 1936 Convention. By January 1, 1940, the Democratic defi-
cit had been reduced to $219,000, some $120,000 of which represented
unpaid loans. In the next two months the party performed the Herculean
task of wiping out its indebtedness altogether, largely by that never-fail-
ing money-raising device, the Jackson Day dinner.ll Thus the Democrats
began the active campaign with their books balanced. On January 1,1940,
much of the Republican indebtedness was still outstanding. During the
next two months, more than $639,000 was expended to meet unpaid bills
of the 1936 campaign.
The limitations of the Hatch Act, imposing a drastic change in rules
just as the whistle was blown for the beginning of the presidential contest,
caused concern in the rival political camps and necessitated some rapid

Cong., 1st Sess., Feb. 15, 1941), pp. 79-80. Hereafter this will be cited as Gillette
Committee, Report.
Gillette Committee, Report, pp. 8-9, 117-29, 143-48.
l o See "Campaign Funds in the Presidential Election of 1936," in this REVIEW,
Vol. 31 (June, 1937), pp. 496-7.
l1 $336,000 of the $412,000 received between Jan. 1 and Feb. 28, 1940, was from
Jackson Day dinners.
704 THE AMERICAN POLITICAL SCIENCE REVIEW

TABLEI

RECEIPTSA N D DISBURSEMENTS
OF NATIONAL
COMMITTEES,
1937-3912

Democratic Republican

Receipts ( Ezpenditures Receipts ) Erpendliures

changes in financial plans. The loosely-drawn, ambiguously worded pro-

visions of the law made the task not too difficult.
The Democrats were poor, but solvent, and disposed to make a virtue
of necessity. I n testifying before the Gillette Committee in September,
their treasurer, Oliver A. Quayle, stated that although a strict interpre-
tation of the act might not require it, his party was prepared to limit to
$3,000,000 the aggregate expenditures of all organizations functioning
nationally, and that obligations contracted for prior to January 1, 1940,
but paid after that date, as well as all other disbursements made during the
calendar year but prior to the date of the passage of the Hatch Act, would
be included as 1940 expenditures.13 The one important change in plans
which the act forced the Democrats to make concerned the Book of the
Democratic Convention of 1940. When the act was passed, plans for a
book similar to that of 1936 had been completed and advertising to the
amount of $340,000 had been sold on a commission basis, netting the com-
mittee about .$170,000. After some grumbling, the plans were abandoned;
sale of advertising ceased, and the book was given away instead of being
sold, as had been intended.lh
Certain interpretations of the Hatch Act would have seriously embar-
rassed the Republicans. As has been pointed out above, the national com-
mittee disbursed more than $639,000 in January and February, 1940, in
payment of 1936 campaign bills. C. B. Goodspeed, treasurer of the com-
mittee, argued that this amount should not be included as 1940 expendi-
tures.15 There was also disagreement concerning collections made by the
national committee under arrangements with state committees and re-
mitted to them, and sums advanced to the senatorial and congressional
campaign committees.16 Mr. Goodspeed's irritation a t an interpretation of
the law which would have included these within the $3,000,000 to which
l2 Data from reports on file in the office of the clerk of the House.
l3 United States Senate, Special Committee Investigating Campaign Expendi-
tures, 1940, Hearings, Vol. 11, pp. 197 ff. These hearings were not printed, but the
writer had access to a mimeographed committee copy. They will be referred to
hereafter as Gillette Committee, Hearings.
l4 New York Times, August 11, 12, 13, 18, 1940.
l6 Gillette Committee, Hearings, Vol. 11, pp. 188 ff. l6 Idem.
 AMERICAN GOVERNMENT AND POLITICS 705

the Republican National Committee was limited was plainly visible when
he said to the Gillette Committee: " . . . I t cannot be that it was the in-
tention of Congress to make it impossible for a political party to present
their candidate and his policies to the public. Otherwise they cannot vote
intelligently and we haven't democracy. If everything is taken off us, we
will not have as much as Wrigley has got to present his chewing gum to
the ~ o u n t r y . " ' ~
Immediately after the passage of the Hatch Act, the joint fund-raising
agreements between the Republican National Committee and the state
organizations were canceled, the fund-raising subcommittees of the na-
tional committee were dissolved, and a series of state finance committees
were created.'* Thus what was hardly more than a paper reorganization
brought the money-raising agencies within the letter of the act.
Most important of all, from the Republican point of view, was the status
of the Associated Willkie Clubs and similar nationally organized inde-
pendent committees. Representatives of these organizations interpreted
the act to permit an expenditure of $3,000,000 by each of these commit-
tees.lS Senator Hatch maintained that it was the intent of Congress to
limit to $3,000,000 the aggregate collections and expenditures of all na-
tional committees supporting Willkie.20 From Colorado Springs, Mr.
Willkie added to the confusion by announcing that he "did not believe in
an expensive campaign," that "the combined total expenses of the Repub-
lican party, the Willkie-for-President Clubs, and the independent Demo-
cratic movement" would be "under $3,000,000, the limitation set by the
Hatch Act," and that he was in favor of the act.21From a study of sub-
sequent tables, it will become evident that the Republican standard-
bearer proved a poor prophet.
The expenditures of the two national committees are summarized in
Table 11. Comparison of these figures with those of other recent campaigns
shows a sharp reduction.22One must go back to the depression year of
l7 Gillette Committee, Hearings, p. 196. l8 Gillette Committee, Report, p. 9.
19 See the statement of Henry P. Fletcher, general counsel of the Republican
National Committee, New York Times, August 4, 1940, and testimony of C. B.
Goodspeed and Orren Root, Jr., Gillette Committee, Hearings, Vol. 11, pp. 34 ff.
and 188 ff. 2 0 Gillette Committee, Hearings, Vol. 111, p. 315.

21 New York Times, Aug. 4, 1940, p. 1.

22 The total expenditure of the national committees in recent election years, in-

cluding bills unpaid and advances t o other committees, were as follows:

Year 1 Democratic Republican

706 THE AMERICAN POLITICAL SCIENCE REVIEW

Democratic Republican

Disbursements, Jan. 1 t o Dec. 3 1 . . . . . . . . . . . . . . $2,438,0928 $3,451,310

Bills unpaid.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 345, 562b -
Total.. ................................ / $2,783,654 / $3,451,310

1936 campaign debts or loans repaid. . . . . . . . . . . $ 149,500 $ 639,3070

Transfers to state and other committees. . . . . . . . 436,338 569, 261d
1940 national committee expenditures.. . . . . . . . . . 2,197,816 2,242,7420

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,783,654 $3,451,310

a Includes loans repaid, totaling $149,500. This is the figure used by the Gillette

Committee and does not include "contracts in the amount of $162,674.20, which
were assigned t o other committees."
Figure as of Aug. 31, 1940, the last figure given. This is exclusive of $77,500
"borrowed money."
This amount is deducted from the Republican report of Sept. 1, 1940, and
omitted from all subsequent reports as "in relation t o 1936 campaign."
The Republican report of Jan. 1, 1941, deducts this sum from receipts and
expenditures as "received by the Republican National Committee as agent for state
committees and remitted back t o state committees in accordance with agency con-
tracts entered into prior t o the passage of the Hatch Act."
This is the figure used by the Gillette Committee.

1932 to find comparable figures. The combined expenditures of the two

committees were less than the $8,890,000 distributed by the Republicans
alone in 1936, and exceeded by only $1,000,000 the $5,194,000 which the
Democratic National Committee spent in that year. The Democrats
clearly kept within the limits of the Hatch Act. Whether or not the Repub-
licans exceeded the limit depends upon how the act is interpreted. If one
includes the $639,000 disbursed in payment of 1936 bills, and the $569,000
collected by the national committee and returned to the state committees
under contracts entered into before the passage of the Hatch Act, the total
exceeds $3,000,000. If either of these amounts is excluded, the total is well
within the limit.
As usual, the largest single expenditure of both national committees
was for radio broadcasting. The Democrats spent $387,224, representing
17.6 per cent of their total outlay, and relatively more than the $582,000
expended in 1936. During the calendar year, the Republican National
Committee disbursed about $570,000 for radio broadcasting, although
23 Data from reports fled in the office of the clerk of the House.
 AMERICAN GOVERNMENT AND POLITICS 707

more than $200,000 of this was in payment of 1936 bills. The expenditure
for radio broadcasting and transcriptions which may properly be charged
to the 1940 campaign was about $335,000, representing fifteen per cent of
the expenditures of the national committee during the calendar year 1940.
The Democrats spent $57,569 for transportation, the Republicans $133,-
000, representing 2.6 per cent and six per cent of their respective disburse-
ments. The printing bill of the Democratic National Committee was
$158,527, and of their Republican rivals $184,460, or 7.2 and eight per
cent of the two The mushroom-like growth of such organiza-
tions is evident from the fact that the weekly pay roll of the Democratic
National Committee rose from $3,288 in January to $18,920 in the last
week of October, only to shrink to $3,617 in December.
If one stopped with the expenditures of the national committees, one
would have a very incomplete picture of the financing of this campaign
and of the effect of the Hatch Act; the real story appears only when one
probes into the expenditures of other organizations. The importance of
the various finance committees which the Republicans organized after the
passage of the Hatch Act is evident from a study of Table 111. Exclusive
of funds transferred to the national committee, and accounted for in
Table 11, these agencies collected more than $6,600,000. Some of these

23" The writer is indebted t o Mr. Goodspeed, treasurer of the Republican Na-

tional Committee, for a copy of the committee's audit of the expenditures from
June 29 to December 31, which makes it possible t o present the following interesting
analysis of the expenditures of t h a t committee during the campaign proper:
Salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Office expenses, including rental, furniture, taxes, supplies. . . . . . . . . .
Publicity
Radio, including transcriptions. . . . . . . . . . . . . . . . . . . . $336,488

Buttons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,606
Motion pictures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68,453
Soundtrucks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47,444
Photographs and lithographs. . . . . . . . . . . . . . . . . . . . . . 30,020
Plate and mat service. . . . . . . . . . . . . . . . . . . . . . . . . . . . 56,277
Printing literature. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103,188
Newspaper advertising, billboards, and miscellaneous 19,455
Travel, including special train, aviation, and expenses of speakers..

Telephone, telegraph, express, postage.. . . . . . . . . . . . . . . . . . . . . . . . . .

Legal and professional.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

"Contingent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Aidtostates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

College Republicans.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Special activities.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Entertainment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

708 THE AMERICAN POLITICAL SCIENCE REVIEW

Organization Receipts Expenditures

Republican Finance Committee of Northern California $ 171,642 $ 170,401

Republican Finance Committee of Southern California 233,608 223,330
Republican Finance Committee of Connecticut. . . . . . 361,667 335,436
Republican Finance Committee of Delaware. . . . . . . . 103,652 104,246

Republican Finance Committee of Illinois.. . . . . . . . . . 742,287 711,841

Kentucky Finance Committee.. . . . . . . . . . . . . . . . . . . . 163,785 162,301

Republican Finance Committee of Michigan. . . . . . . . 376,983 338,203

Republican Finance Committee of Missouri. . . . . . . . . 454,061 458,284

Republican Finance and Budget Committee of Ne-

braska . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88,164

New Jersey Republican Finance Committee.. . . . . . . . 545,811

United Republican Finance Committee of Metropoli-

tan New York . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,989,969

Republican Finance Committee of Ohio. . . . . . . . . . . . 446,007

Republican Finance Committee of Oregon. . . . . . . . . . 94,115

Republican Finance Committee of Pennsylvania. . . . . 1,162,645"

Republican Finance Committee of Tennessee.. . . . . . . 12,395

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $6,946,791

Transferred t o Republican National Committee. . . . . 328,633

Net Total.. /
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $6,618,158 1 $5,983,408

a Exclusive of funds held i n escrow for counties and handled as receipts for

accounting purposes only.

funds were distributed to state and local committees, some were spent
directly; but all of them aided the presidential candidate of the Republican
party, directly or indirectly. Legislation which permits an unlimited num-
ber of such committees to raise and spend $3,000,000 each leaves a hole as
wide as a barn door in the limitation and is farcical.
The end of the story has not yet been reached, as Table I V shows. I n
every presidential campaign, a certain number of non-party organizations
rise to the support of their chosen candidates. I n 1928, Hoover received
the support of a variety of anti-Smith, dry o r g a n i ~ a t i o n s and
; ~ ~ Labor's
Non-Partisan League and the Liberty League were among the numerous
groups playing an important r61e in the 1936 campaign.26I n no previous
2 4 Figures for New Jersey and Pennsylvania and transfers from finance com-

mittees to Republican National Committee from reports filed in the office of the
clerk of the House; other data from the Gillette Committee, Report, pp. 117-29.
26 For a description of the activities of these organizations, see t h e writer's
M o n e y in Elections, pp. 165-8.
26 See "Campaign Funds in the Presidential Election of 1936," op. cit.
 AMERICAN GOVERNMENT AND POLITICS 709

Favoring Democrats Expenditures

National Committee of Independent Voters for Roosevelt and

Wallace . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$
National Committee for Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . .
Business Men's League for Roosevelt . . . . . . . . . . . . . . . . . . . . . . . . . .
.
250. 4558

131 48gb

59. 973

Young Democracy (Illinois) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26. 394

Young Democratic Clubs of America . . . . . . . . . . . . . . . . . . . . . . . . . . 16. 420

Hollywood for Roosevelt Committee . . . . . . . . . . . . . . . . . . . . . . . . . . 12. 983

Non-Partisan League of Clothing Workers (New York) . . . . . . . . . . 12. 405

Employees for Roosevelt (New York) . . . . . . . . . . . . . . . . . . . . . . . . . 11.962

Democratic State Councils of Americans of Italian Origin . . . . . . . . 11. 184

Labor Joint Committee for Roosevelt and Wallace (Ohio) . . . . . . . . 10. 036

Favoring Republicans

Associated Willkie Clubs of America . . . . . . . . . . . . . . . . . . . . . . . . . . $1.355. 604

Democrats for Willkie . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 416. 808

National Committee to Uphold Constitutional Government . . . . . . 377. 381

Citizens Information Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176. 248

Maryland Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110. 223

Willkie War Veterans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78. 001

People's Committee t o Defend Life Insurance and Savings . . . . . . . 58. 871

Jefferson Democrats of California . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41. 440

Pro-America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37. 950

Willkie Magazine Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29. 537

No-Third-Term Democrats of Illinois . . . . . . . . . . . . . . . . . . . . . . . . . 23. 352

Ohio No-Third-Term Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20. 580

Independent Willkie Advertising Campaign . . . . . . . . . . . . . . . . . . . . 17. 937

Women's National Republican Club . . . . . . . . . . . . . . . . . . . . . . . . . . . 16. 974

Clearing House for National Interests . . . . . . . . . . . . . . . . . . . . . . . . . 13. 580

National Committee of Physicians for Willkie . . . . . . . . . . . . . . . . . . 11.712

"We. the People" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.414

$54. 100 of this was contributed by trade unions .

b $54. 000 of this came from the Democratic National Committee.

campaign in our history. however. have the non-party agencies been as

many and as varied as in 1940. and never before have they invested so
heavily in a campaign .
The most important organizations aiding the Democratic candidates
were the National Committee of Independent Voters for Roosevelt and
Wallace ($250.000) and the National Committee for Agriculture ($131.-
489) . In testifying before the Gillette Committee in September. Sol Rosen-
blatt. general counsel of the Democratic National Committee. stated that
27 Figures from the Gillette Committee. Report. p p . 106-29 .

710 THE AMERICAN POLITICAL SCIENCE REVIEW

although these organizations were independent of the national committee,

it was aware of their activities, and that the aggregate expenditures of all
three organizations would be kept within the $3,000,000 limit.28 If bills
unpaid a t the end of the year are excluded from the disbursements of the
national committee, and the $54,000 which this organization contributed
to the National Committee for Agriculture is subtracted, the aggregate
expenditure of the three organizations was $2,766,036, or well within the
limit. If, however, one adds bills contracted for by the national committee
but unpaid a t the end of the year, the total would exceed the limit by over
~110,000.~~
From official and unofficial statements of those in command of the
Democratic campaign, it is apparent that their early plans called for no
large expenditure of funds and that they expected to keep the disburse-
ments of the three national organizations well within the $3,000,000
limit.30 Late in the campaign, thrown into a near panic by the rising tide
of Willkie votes in the Gallup poll, a number of expensive national radio
broadcasts were added to the publicity program. It was apparent that
if these were paid for by the Democratic National Committee, aggregate
expenditures of the three national organizations would exceed $3,000,000.
Consequently, a few days before the election, radio contracts entered into
by the national committee were canceled, and officials of that organiza-
tion arranged to have various state committees assume these obligations
and asked Richard J. Reynolds to lend them the funds necessary to finance
the program. As a result of these arrangements, Mr. Reynolds made loans
of $75,000 and $100,000, respectively, to the New York and New Jersey
28 Gillette Committee, Hearings, Vol. 11, pp. 166 ff.
29 Democratic National Committee.. . . . . . . . . . . . . . . . . . . . . . . . . .

National Committee of Independent Voters. . . . . . . . . . . . . . . . .

National Committee for Agriculture.. . . . . . . . . . . . . . . . . . . . . . .

Total expenditures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Contributions of Democratic National Committee to National

Committee for Agriculture. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Unpaid bills of Democratic National Committee. . . . . . . . . . . . .

Total running expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30 See Mr. Quayle's statements to the press after the passage of the Hatch Act
(New York Times, Sept. 12, 1940) and his testimony before the Gillette Committee
(Hearings, Vol. 11, pp. 197 ff.). Similar statements were made to this writer by Mr.
Quayle and other members of his staff early in October. The atmosphere of the
headquarters of the Democratic National Committee a t that time was one of op-
timism, and the opinion generally expressed was that the election would be carried
without a large expenditure of money.
 AMERICAN GOVERNMENT AND POLITICS 711

state committees. After the election, he lent an additional $100,000 to

the New York committee. An earlier loan of $25,000 to the Illinois state
committee was said to be for general campaign purposes. Mr. Reynolds'
loan to state committees, therefore, totaled $300,000.31
Mr. Quayle's original statement that he, personally, arranged these
loans with Mr. Reynolds was denied by Mr. Reynolds, who testified that
the arrangements had been made by Wayne Johnson, national director
of finance of the Democratic National Committee. In later testimony be-
fore the cornmitteelMr. Quayle admitted that his earlier statement was in
error and corroborated Mr. Reynolds' version. Another point in dispute
was whether the original contracts between the national committee and
the radio companies were canceled before or after the election. Mr.
Quayle's report of December 31, 1940, covered the transactions in the
following note appended to the statement of disbursements: "Exclusive
of obligations represented by contracts in the amount of $162,674.20
which were assigned to other committees."
Mr. Reynolds is a stockholder in the R. J. Reynolds Tobacco Company
and numerous other corporations. He was director of finance for the
national committee in North Carolina until his appointment as treasurer
of the Democratic committee in January, 1941. His $100,000 loan to the
New Jersey committee represented the bulk of its total receipts of
$133,000.32Among the broadcasts paid for by these loans were President
Roosevelt's speech the Saturday evening preceding the election, and the
speech made by Senator Norris toward the close of the campaign.
The importance of non-party organizations in the financing of the Re-
publican campaign is evident from Table IV above. As the campaign pro-
gressed, Mr. Willkie's hope that the combined expenditures of the national
committee, the Willkie Clubs, and the Democrats for Willkie might be
kept within the $3,000,000 was cast to the four winds. At the close of the
campaign, their aggregate disbursements, exclusive of the national com-
mittee's payments on 1936 campaign bills and advances to the states,
aggregated over $4,000,000.33In addition to these important nation-wide
Gillette Committee, Report, pp. 10-11. See also the testimony of Mr. Quayle,
Mr. Reynolds, and Charles D. Quinn, secretary of the New Jersey Democratic
Central Committee, Gillette Committee, Hearings, Vol. VI, pp. 552-80; Vol. VIII,
pp. 687-709; Vol. I X , pp. 752-3; and statement of Senator Tobey, Gillette Com-
mittee, Report, pp. 81-88, urging the committee to seek to determine whether these
transactions constituted a conspiracy to violate the Hatch Act, and to recommend
prosecutions to the Department of Justice.
See Gillette Committee, Report, p. 124.
a3 Republican National Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . $2,242,742

Associated Willkie Clubs.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,355,604

Democrats for Willkie. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 416,808

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,015,154

712 THE AMERICAN POLITICAL SCIENCE REVIEW

organizations, more than eighty other independent groups had spent

money in preaching the Willkie The more important ones are
listed above in Table IV. Some of these operated on a nation-wide scale,
others within certain geographic sections, while many confined their ac-
tivities to a single state or sub-division of a state. All but the National
Committee to Uphold Constitutional Government came into being in 1940
and acknowledged that they were political committee^.^^ The following
list of names gives some idea of the variety of their appeals: "People's
Committee to Defend Life Insurance and Savings," "Willkie Magazine
Fund," "Willkie War Veterans," "We, the People," "National Committee
of Physicians for Willkie," "Writers for Wendell L. Willkie," "Townsend
National Voters League," "Stockyard District Willkie Club," "Chicago
Business Men's Election Committee," "Minnesota Lawyers 'No Third
Term Association' Committee," "Retailers for Willkie," "Clergymen's
National Committee for Willkie," "Posters for Subway Platforms,"
"Lawyers No Third Term," "Labor for Willkie," "Willkie-for-President
Club of Akron," "Jeffersonian Democrats of California," "Pro-America,"
and "Polish-American National Security League." Almost every stra-
tum of society and every interest group was honeycombed by their
activities; few remained outside the orbit of their comprehensive money-
raising a c t i v i t i e ~ . ~ ~
Information assembled by the Gillette Committee concerning funds
raised and expended by state and local committees, as well as those func-
tioning nationally, makes it possible to present a more complete picture of
the financing of a presidential campaign than has ever been available
before. A summary, presented in Table V, shows a Democratic total
slightly below $6,000,000. The Republicans spent slightly less than
$15,000,000, making a total of close to $21,000,000. Unquestionably there
are some duplications in these figures. Not all transfers of funds have been
traced and deducted, although the more important ones were subtracted
See Gillette Committee, Report, pp. 106-29. Some of these are listed in Appen-
dix IV, some in Appendix V. The classification is not altogether logical, apparently
being based upon whether the organization filed a report with the clerk of the House
or with a state or local officer.
36 According t o the testimony of Samuel B. Pettengill, chairman of the National

Committee t o Uphold Constitutional Government, it was organized in 1937 t o

oppose the Supreme Court reorganization plan. The leading spirit was Frank
Gannett of Rochester. Later, the organization opposed the reorganization of the ad-
ministrative branch of the government, the Roosevelt "purge" in the 1938 primaries,
the Wagner Act, "socialization of medicine,'' and the third term. I n 1940, it claimed
t h a t it was not engaged in a campaign for the election of a particular candidate,
and hence was not a "political committee" within the definition of the Corrupt
Practices Act, but conceded t h a t its anti-third-term activities aided Willkie. Gillette
Committee, Hearings, Vol. 111, pp. 222-56.
I n many communities there was literally house-to-house canvassing for funds.
 AMERICAN GOVERNMENT AND POLITICS 713

in the Gillette Committee report. One should remember, also, that state
committees spent funds on behalf of state and local candidates, as well as
those on the national ticket. As the Gillette Committee points out, how-
ever, it is fair to assume that a large percentage of the expenditures of
these state committees was made in support of the national ticket^.^' I t
should be remembered, also, that many of the expenditures of various
local groups, not here included, aided the national tickets.
The $21,000,000 total above is not an accurate figure for the expendi-
tures in behalf of Roosevelt and Willkie in 1940. But it is the closest ap-
proximation to the total cost of a national campaign which has ever been

Democratic Republican Total

National committees
Expended during
campaign. . . . . . $1,852,254 $2,242,742
Bills unpaid. . . . . . 345,562 -
Total. . . . . . . . . . . . $2,197,816 $ 2,242,742 $ 4,440,558
Independent nation-
al groupss. . . . . . . . 557,048 2,832,167 3,389,215
State committees,
including finance
committeesb.. . . . . 2,785,660 10,791,625 13,577,285
Independent state
committees,groups,
or individuals. . . . 314,558 754,901 1,069,459

Total. . . . . . . . . . $5,855,082 $16,621,435 $22,476,517

Less transfers from
finance commit-
tees to state com-
mittees. . . . . . . . . . 1,680,293 1,680,293

-
Net total. . . . . . $5,855,082 $14,941,142, $20,796,224

a Including such important non-party organizations as the Associated Willkie

Clubs of America and the National Committee of Independent Voters for Roosevelt
and Wallace.
b Including the United Republican Finance Committee of Metropolitan New
York and other similar finance committees.

31 Report, pp. 10 and 11.

38 Except for the national committees, these figures are taken from the Gillette
Committee, Report, pp. 10-11, and tables, pp. 106-42. Unquestionably other trans-
fers of funds should be subtracted from both lists, but it is impossible to trace these
with accuracy.
714 THE AMERICAN POLITICAL SCIENCE REVIEW

made available, and the relative expenditures of the two parties deserve
careful consideration. It is reasonable to suppose that the figures are as
accurate in the case of one party as in that of the other. If this is true,
more than twice as much was spent on behalf of the defeated candidate
as was expended to re-elect the "third term candidate." Once again the
losers were conspicuously more extravagant than the winners. The elec-
tion of 1940, like the two earlier Roosevelt victories, shows that campaigns
cannot be won by money alone.39
It is also evident from the above table that if the purpose of the Hatch
Act was to limit to $3,000,000 the aggregate expenditures of all political
committees supporting the same presidential candidate, i t failed miser-
ably. I n fact, the act seems to have had no reducing effect whatever. In
the one campaign for which we have even approximately comparable
records-that of 1928-the combined expenditures of national, state, and
independent committees was $16,500,000.40These figures are probably less
complete than those for 1940, but with a very liberal allowance for that
fact, it seems reasonable to conclude that more, rather than less, was spent
in 1940. In 1936, the national committees spent more than they did in
1940, but since figures for the expenditures of other organizations are not
available we have no basis for comparison of the total cost of these two
campaigns.
The financing of the campaign by the national committees of the two
parties (Table VI) is an interesting study in contrasts. Except for $200,000
received from the Convention Arrangements Committee, the Republican
National Committee relied entirely upon cash contributions. The Demo-
crats, however, raised more than $750,000 from Jackson Day dinners and
the Book of the 1940 Convention, two money-raising devices which had
proved their worth in 1936. I n addition, i t borrowed $105,000 in the course
of the year. Except for $10,000 from the Manufacturers Trust Company
borrowed early in January, there were no bank loans, and no single loan
of more than $5,000. The total receipts of the national committees were
conspicuously less than in 1928 and 1936, but exceeded those of the de-
pression year 1932.41
The analysis of contributions presented in Table VII is interesting for
39 See the writer's "Campaign Funds in a Depression Year," in this REVIEW,
Vol. 27 (Oct., 1933)) p. 770; and "Campaign Funds in the Presidential Election of
1936," o p . cit.
4 0 See Money i n Elections, p. 75. The figures are from the report of the Steiwer

Committee. The Democratic total was $7,152,000; the Republican, $9,433,000.

41 The figures are as follows:

Democratic Republican
1928 $5,721,381 $6,610,273
1932 2,378,688 2,649,554
1936 5,206,159 7,761,039
 AMERICAN GOVERNMENT AND POLITICS 715

TABLEVI

RECEIPTSOF THE NATIONAL

COMMITTEES,
JANUARY
1 TO DECEMBER
31, 194W2

/ Demonata 1 Republicans

Cash contributions.. . . . . . . . . . . . . . . . . . . . . . $1,339,483

Advertising in Book. . . . . . . . . . . . . . . . . . . . . . 338,069

Sale of convention boxes.. . . . . . . . . . . . . . . . . 6,000

Jackson Day dinners. . . . . . . . . . . . . . . . . . . . . 422,582

Convention committee. . . . . . . . . . . . . . . . . . . 125,000

Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105,000

Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . 1 115,998

Total. . . . . . . . . . . . . . . . . . . . . . . . . . . .1 $2,452,132

I n the reports of the treasurer of the Republican National Committee,

$569,260.76, "contributions received as agent for state committees and remitted
back to state committees in accordance with agency contracts entered into prior
to the passage of the Hatch Act, ...
," is subtracted from this figure.

several reasons. Organized labor, in spite of John L. Lewis' endorsement

of Willkie, contributed 6.2 per cent of the funds of the Democratic
National Committee, relatively more than in 193f1.~~ This does not mean,
however, that labor gave Roosevelt more financial support in 1940 than
in 1936, or that C.I.O. groups contributed as heavily. Much of the
$770,000 which labor invested in the 1936 campaign was given to such
independent organizations as Labor's Non-Partisan League, which were
inactive in 1940. The only independent organization which received sub-
stantial financial support from labor in 1940 was the National committee
of Independent Voters for Roosevelt. More than $50,000 of the total
receipts of this organization came from various trade union AS
the Gillette Committee made no special study of the r61e of the trade
unions in 1940, it is impossible to tell how much they may have contrib-
uted to state and local committees.
The most generous trade union contributions to the National Commit-
tee of Independent Voters came from the International Ladies Garment
Workers and the Amalgamated Clothing Workers, both of which gave
generously in 1936. The United Mine Workers of America is conspicuously
absent from the list of contributors, although one Tennessee local did
make a $100 gift late in October. The Democratic National Committee
received most of its financial support from local unions of brewery work-
42Data from the reports filed in the office of the clerk of the House.
43I n 1936, labor contributed 5.1 per cent of the funds of the Democratic National
Committee.
44 See Table I V above. Labor's Non-Partisan League was inactive in 1940; it
raised no funds and spent only $2,000.
716 THE AMERICAN POLITICAL SCIENCE REVIEW

ers, teamsters, and the railway brotherhoods, with some representation

from groups in the building trades. The amounts were usually small-
$100 or $200-and contributions of $1,000 or more were the exception.
There is no evidence that the United Mine Workers, or any other labor
group, contributed to the Republican National Committee or any of the
national Willkie organizations.
TABLEV I I
DISTRIBUTION
BY SIZEOF CONTRIBUTIONB
TO NATIONAL
COMMITTEES,JANUARY 1 TO DECEMBER31, 194(r6

Democrats Republicans

Per Cent Per Cent

Group No. of Amount Contrib- NO. of Amount Contrib-
Contrib- Contributed uted by Contrib- Contributed uted by
utors by Group Group utors by Group Group
--
$5,000 andover 35 $ 175,000 13.1 22 $ 111,000 3.8
1,000-4,999 158 262,536 19.6 712 1,123,127 38.3
100- 999 1,380 232,287 17.3 4,288 900,272 30.7
Less than $100 36,265 312,124 23.3 34,108 391,318 13.4
Impossible t o
allocate
Labor 113 82,841 6.2 - - -
Other 47 274,695 20.5 39 405,494 13.8
--
Total 37,998 $1,339,483 100.0 39,169 $2,931,211 100.0

The relative importance of large and small contributors is also apparent

from Table VII. Contributions of less than $100 made up 23.3 per cent of
the Democratic fund, but only 13.4 per cent of the Republican fund was
given in these small amounts. The small contributor has played an in-
creasingly important rBle in the financing of the Democratic National
Committee since 1928.46When one considers that in 1940 an additional
six per cent of the party's contributions came from trade union groups,
and that the receipts from Jackson Day dinners represent small, rather
than large, contributions, one has convincing evidence that the Demo-
cratic party has returned to its Jeffersonian tradition and is once again
4"his table includes cash contributions only. I n the case of the Democrats, it
does not include those who contributed by attending Jackson Day Dinners. Collec-
tions made by clubs or committees are listed as "Impossible t o allocate." The num-
ber of contributions credited t o "Labor" are those of groups rather than individuals,
and each represented the gift of a large number of trade union members. The figure
for the total number of Republican contributors represents the receipts issued
during the calendar year 1940. The writer is indebted t o Mrs. Mary C. Salisbury,
comptroller of t h e Democratic National Committee, for t h e number of contributors
t o that organization.
4 T h e percentages are as follows: 1928, 12.5; 1932, 16.0; 1936, 18.5.
 AMERICAN GOVERNMENT AND POLITICS 717

the party of the "little fellow." I n contrast to this, the small contributor
played a less important r61e in the Republican party in 1940 than in
1936.47
A study of the upper brackets in Table VII shows a sharp decrease in
importance of contributions of $5,000 or more. I n 1936, 26.0 per cent of
the contributions of the Democratic party fell into this class; in 1940, the
percentage had dropped to 13.1 per cent. Even more striking is the drop
in the Republican percentage from 24.2 to 3.8. However, if one probes
into the contributions of the next two groups, one finds that although in
the Democratic party the relative importance of contributors in the two
groups, $1,000 to $4,999, and $100 to $999, remained constant in 1936
and 1940, in the Republican party, contributors in these two brackets
were much more important in 1940 than in 1936.48Thus, in the Demo-
cratic party, the loss of large contributions was offset by many very small
gifts, but in the case of the Republicans the change was the less radical
shift from very large contributions to those of medium size. The fact that
a large number of the contributions in the $1,000 to $4,999 group were in
amounts of $4,000 makes the shift even less ~ i g n i f i c a n t . ~ ~
I n 1940, neither national committee made a spectacular "drive" for
a record number of contributors, and the number giving to the respective
party organizations was probably less than in 1936. The number of con-
tributors to the Democratic National Committee was 37,998, while 39,169
contributions were recorded by the Republican National C ~ m m i t t e e . ~ ~
However, neither figure gives an accurate picture of the number of persons
participating in the financing of the campaign. The Democratic figure
does not include the large number of trade union members whose dues
helped make up the contributions from labor organizations, nor the
numerous party enthusiasts whose attendance a t Jackson Day dinners
helped to swell the party fund.61The Republican figure is equally mislead-
ing because it does not include the number of persons contributing to the
finance committees and to the numerous Willkie Clubs. There were over
29,000 contributors to the New Jersey Republican Finance Committee
alone, and thousands contributed to the United Republican Finance Com-
mittee of Metropolitan New Y ~ r k It. ~is ~not unlikely that more voters
47 The Republican figures are: 1928, 8.2; 1932, 9.1; 1936, 13.5.
48 I n 1936, contributions of $1,000 t o $4,999 represented 19.4 per cent of the
total Democratic funds; contributions of $100 t o $999 represented 18.0 per cent.
The Republican figures for 1936 are as follows: $1,000 t o $4,999, 26.8 per cent; $100
t o $999, 23.9 per cent. 4 9 There were 56 contributions of $4,000.

The 1936 figures are: Democratic, 54,818; Republican, 84,770.

61 Reports from 33 of the states which held dinners in 1940 indicate t h a t they

were attended by 18,159 persons. The writer is indebted t o Mrs. Mary S. Salisbury,
comptroller of the Democratic National Committee, for this information.
62 The reports which this committee filed in the office of the clerk are spread

through 37 fat volumes.

718 THE AMERICAN POLITICAL SCIENCE REVIEW

contributed to Willkie's campaign than to that of any Republican candi-

date in history.
One purpose of the Hatch Act was to limit individual contributions to
$5,000 and, for the most part, the letter of the law was observed. The
Democratic National Committee received no contributions of more than
that amount during the calendar year 1940. The Republican records show
a few cases in which the total contributed by an individual was $6,000.
F. M. Hesse, of Pittsburgh, contributed $4,000 to the Republican Na-
tional Committee before the passage of the Hatch Act, and $2,000 to the
same organization in October, after the passage of the act. The records of
the Associated Willkie Clubs of America credit Stanley Resor with $4,000
on October 16 and $2,000 on October 31. Contributions to a single organ-
ization, after the passage of the act, totaling more than $5,000 would seem
to be a violation of its provisions, however leniently one interprets it.
I n both parties, the aggregate contributions of husbands and wives or
members of the same families frequently exceeded $5,000, as Tables VIII
and I X show. The Biddles, the Claytons, the Davies, the Morgenthaus,
and the Strauses, all of whom hold positions in the Roosevelt administra-
tion, were among the families contributing most generously to the Demo-
cratic Committee (Table VIII). Table I X includes only the more con-
spicuous family contributions to the Republican National C ~ m m i t t e e , ~ ~
TABLEVIII
FAMILIESC ONTRIBUTING
MORETHAN$5,000 TO DEMOCRATIC NATIONAL
JANUARY
COMMITTEE, 1 TO DECEMBER 31, 1940M

Name Address Amount

Biddle, A. J . Drexel, Jr.. . . . . . . . . . . . . Philadelphia, Pa. $5,000

Riddle, Mrs. A. J . Drexel.. . . . . . . . . . . . Philadelphia, Pa. 5,000
Clayton, W. L.. . . . . . . . . . . . . . . . . . . . . Houston, Texas 5,000
Clayton, Mrs. W. L . . . . . . . . . . . . . . . . . Houston, Texas 5,000
Davies, Joseph E.. . . . . . . . . . . . . . . . . . . Washington, D. C. 5,000
Davies, Marjorie Post (Mrs. Joseph E.) Washington, D. C. 5,000
Getty, J. Paul.. . . . . . . . . . . . . . . . . . . . . Los Angeles, California 2,500
Getty, Sarah C.. . . . . . . . . . . . . . . . . . . . Los Angeles, California 5,000
Morgenthau, Henry. . . . . . . . . . . . . . . . . 1133 Fifth Avenue, New York 5,000
Morgenthau, Mrs. Henry. . . . . . . . . . . . 1133 Fifth Avenue, New York 1,000
Morgenthau, Henry, J r . . . . . . . . . . . . . . Washington, D. C. 1,000
Pauley, Edwin W.. . . . . . . . . . . . . . . . . . Los Angeles, California 5,000
Pauley, Harold R.. . . . . . . . . . . . . . . . . . Los Angeles, California 5,000
Straus, Nathan.. . . . . . . . . . . . . . . . . . . . Washington, D. C. 5,000
Straus, Mrs. N a t h a n . . . . . . . . . . . . . . . . Washington, D. C. 5,000

63 The Gillette Committee, Report, pp. 143-7, lists the contributions of other

"prominent" families to various pro-Willkie organizations.

64 From the reports filed with the clerk of the House.
 AMERICAN GOVERNMENT AND POLITICS 719

but it gives convincing evidence that a limitation may be circumvented

by substituting many small gifts for a single large one.
Table IX also demonstrates that a limitation upon the size of individual
contributions which does not cover gifts to state and local committees is

National Committee Other Or-

Total I n - Total
Name
193'7-39 1 1940
ganizations
1940 dividual Family

Brown
Donaldson . . . . . . . . . . . $ 1,000 $ 4,000
Mrs. Donaldson.. . . . . -

Total . . . . . . . . . . . . $ 1,000 $4,000 $ 23,000 $ 28,000

Copley, Ira C.. . . . . . . . . . $ 2,000 $ 1,000 $ 29,900 $ 32,900

du Pont
Eugene . . . . . . . . . . . . . . - $3,000 $ 2,500 $ 5,500
H . F. . . . . . . . . . . . . . . . . - - 5,000 5,000
IrBnBe . . . . . . . . . . . . . . . - 12,000 12,000
Lammont.. . . . . . . . . . . 4,000 4,000 45,000 53,000
Lydia . . . . . . . . . . . . . . . - 6,000 6,000
Octavia M.. . . . . . . . . . - - 5,000 5,000
Pierre S., 111.. . . . . . . . , - - 5,000 5,000
Reynolds. . . . . . . . . . . . - 5,000 - 5,000
Fifty-eight other mem-
bersoffamilys . . . . . . - 5,000 102,280 107,280

Total.. . . . . . . . . . $ 4,000 1 $17,000 $182,780 $203,780

A. Felix, A. Felix, Jr., Alfred V., Alice B., Miss Amy, Eileen M., Eleanor Hoyt,
Eleuthera, Mrs. Eugene, Francis I., Henry B., Mrs. H. P., Hubert I., Irene S.,
Janet G., Mrs. Lammont, Mrs. Mary Chichester, N. R., P. S., Mrs. Pierre S., F. S.
and Alice B., RBnBe and Richard D. du Pont; also Alice du Pont Buck, Mary
du Pont Faulkner, R6nBe du Pont Kitchell, Jane du Pont Lunger, I. Sophie du Pont
May, Mrs. Alice du Pont Mills, Alex du Pont Perkins, Edith du Pont Riegel, Mrs.
Phyllis du Pont Schutt, Manoir du Pont Scott, Isabelle du Pont Sharp, Mrs. Deo
du Pont Weymouth, Ellen du Pont Wheelwright, Esther du Pont Weir, James N.
Andrews, H. F. Brown, Mr. and Mrs. John T. DeBlois-Wack, Molly Laird Downs,
Alleta L. Downs, Mrs. Robert Downs, Natalie Edmonds, Mrs. James H. Faulkner,
Lucile E. Flint, Mrs. Bruce Ford, C. N. Greenwalt, Margaretta L. Greenwalt, Rosa
Laird, Wilhelmina Laird, William Winder Laird, Jr., Mrs. Sophie du Pont Laird,
Ernest Nugent May, Anne Peyton, Richard Eveland Riegel, H. S. Schutt, H. Rod-
ney Sharp, Mrs. Henry H. Silliman.
55 Except for contributions to the National Committee, data are from Gillette
Committee, Report, pp. 143-7.
 AMERICAN GOVERNMENT AND POLITICS 721

farcical . Most of the money contributed by members of these families to

the Willkie cause was given to organizations other than the national
committee . The distribution of the gifts of two of these individuals is
shown in Table X . Lammont du Pont contributed to three finance com-
TABLEX

DIBTEIBUTION
OF CONTRIBUTIONS
OF THE TWOLARGEST CONTRIBUTORB

TO
THE REPUBLICANCAMPAIGN.
194OS6

du Pont. Lammont

Republican National Committee . . . . . . . . . . . . . . . . . . . . . . . . . $4. 000

Republican Senatorial Campaign Committee . . . . . . . . . . . . . . 4 . 000

Republican Finance Committee of New Jersey . . . . . . . . . . . . 1 . 000

Republican Central Committee of New Jersey . . . . . . . . . . . . . 3 . 000

Maryland Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . 000

Tennessee Republican Executive Committee . . . . . . . . . . . . . . 4 . 000

West Virginia Republican State Committee . . . . . . . . . . . . . . . 4 . 000

Wyoming Republican State Committee . . . . . . . . . . . . . . . . . . . 4 . 000

Missouri Republican State Committee . . . . . . . . . . . . . . . . . . . . 4 . 000

South Dakota Republican Central Committee . . . . . . . . . . . . . 4 . 000

Ohio Republican State Central Committee . . . . . . . . . . . . . . . . 1 . 000

Indiana Republican State Finance Committee . . . . . . . . . . . . . 4 . 000

Republican Finance Committee of Pennsylvania . . . . . . . . . . . 4 . 000

Ohio Republican Finance Committee . . . . . . . . . . . . . . . . . . . . . 4 . 000

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $49. 000

Queeny. Edgar Monsanto

Republican National Committee . . . . . . . . . . . . . . . . . . . . . . . . . $5. 000

Republican Congressional Committee . . . . . . . . . . . . . . . . . . . . 4 . 000

Republican Senatorial Campaign Committee . . . . . . . . . . . . . . 4 . 000

Republican Finance Committee of Pennsylvania . . . . . . . . . . . 4 . 000

Republican Finance Committee of Connecticut . . . . . . . . . . . . 4 . 000

United Republican Finance Committee of New York . . . . . . . 750

Kentucky Republican State Committee . . . . . . . . . . . . . . . . . . . 4 . 000

Missouri Republican Finance Committee . . . . . . . . . . . . . . . . . 4 . 000

Wyoming State Republican Committee . . . . . . . . . . . . . . . . . . . 1.000

Missouri Republican State Committee . . . . . . . . . . . . . . . . . . . . 4 . 000

Paid personally to Ketchum. Inc., for services of advertising

counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . 625

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $40. 375

mittees. to state committees as widely removed from his home state as

South Dakota. Wyoming. and Missouri. as well as to the Republican
National Committee and the Senatorial Campaign Committee . Edgar
Monsanto Queeny. resident of Missouri. contributed to finance com-
mittees and state committees in Connecticut. New York. Pennsylvania.
and Wyoming .
66 From the Gillette Committee. Report. pp . 143-7 .
722 THE AMERICAN POLITICAL SCIENCE REVIEW

The $203,000 contributed by members of the du Pont family, the

$164,500 contributed by the Pews, and the $113,000 which the Rocke-
feller~gave indicate that the framers of the Hatch Act failed to eliminate
the dominant r6le of "America's Sixty Families" in the financing of
political campaigns. The "haves" could, and did, rise to the defense of the
system under which their fortunes had been made. Nevertheless, it is
probable that the $5,000 limitation had some restraining effect. I n 1936,
the du Ponts and the Pews contributed more than $1,000,000 to various
Republican organizations; in 1940, their financial stake in the campaign
was less than half as great.
The Democrats, whether from virtue or from necessity, conformed more
closely to the spirit as well as the letter of the $5,000 limitation. The ag-
gregate contributions of an individual exceeded $5,000 in only one in-
stance. A. J. Drexel Biddle, Jr., gave $5,000 to the Democratic National
Committee on September 10 and an equal amount to the Pennsylvania
State Committee on the same date.57 One should not forget, however,
that Richard J. Reynolds, who had contributed $5,000 to the Democratic
National Committee in September, made loans to various state com-
mittees which totaled $300,000. This involved no violation of the Hatch
Act, but it was hardly healthy financing.
A study of the economic interests of the larger contributors to the
national committees, presented in Table XI, shows some interesting con-
trasts and gives further evidence of a Hamiltonian-Jeffersonian cleavage
in 1940. The Democratic party failed to regain any of the support of the
bankers and brokers who deserted the party in 1936,58and lost the sup-
port of most of the manufacturers. In 1936, manufacturers furnished
13.6 per cent of the large Democratic contributions, but in 1940 only
7.4 per cent came from this source. On the other hand, the Republican
party received about the same proportion of its large contributions from
bankers and brokers in 1940 as in 1936, and the support of manufacturers
rose from 29.6 per cent in 1936 to 34.0 per cent in 1940. Almost half of all
the Republican contributions of $1,000 or more came from these two
groups in 1940. Particularly striking was the way in which the "giants"
-iron and steel-came to the aid of the party.
The two groups which gave most generously to the Democratic party
in 1940 were officeholders-diplomats for the most part-and organized
labor. Four years before, these two groups had given about one-quarter of
the contributions of $1,000 or more; in 1940 their share of the campaign
fund rose to more than one-third. Brewers and distillers; oil men; news-
paper, radio, and advertising interests; and members of the professions
Gillette Committee, Report, p. 148.
68Only 3.3 per cent of the contributions of $1,000 or more came from this group
in 1936, compared t o 25.3 per cent in 1928 and 24.2 per cent in 1932.
 AMERICAN GOVERNMENT AND POLITICS 723

DISTRIBUTION BY ECONOMIC
INTEREST
OF CONTRIBUTIONS

OF $1,000 OR MORETO NATIONAL 194OS9

COMMITTEES,

Democrats Republicans
ClassiJication
Amount I

Per Cent Amount l ~ e Cent

r

Bankers and brokers. . . . . . . . . . . . . . $ 16,000

Manufacturers. . . . . . . . . . . . . . . . . . . 38,500

Iron and steela. . . . . . . . . . . . . . . . . . 17,500

Chemicals. . . . . . . . . . . . . . . . . . . . . . 3,000

Other . . . . . . . . . . . . . . . . . . . . . . . . . . 18,000
Brewers and distillers . . . . . . . . . . . . . 20,500
Oil, including refining and oil land
development . . . . . . . . . . . . . . . . . . . 27,500
Mining, including coal, copper, and
aluminum . . . . . . . . . . . . . . . . . . . . . . -
Public utilitiesb. . . . . . . . . . . . . . . . . . . 9,500
Merchants: wholesale and retail. . . . 10,000
Building materials (including lum-
ber) and contracting.. . . . . . . . . . . 6,500
Newspapers, radio, advertising. . . . . 23,369
Professions.. . . . . . . . . . . . . . . . . . . . . . 44,500
Officeholders . . . . . . . . . . . . . . . . . . . . . 100,500
Organized labor. . . . . . . . . . . . . . . . . . 82,841
Other classifications. . . . . . . . . . . . . . . 29,000
Unidentified . . . . . . . . . . . . . . . . . . . . . . 111,667

T o t a l . . . . . . . . . . . . . . . . . . . . . . . . $520,377

Including industrial and farm machinery, but not automobiles.

b Including railroads, steamship lines, and buses, as well as gas and electricity.

(mostly lawyers) were also well represented among the Democratic con-
tributors.
Although most of the newspapers of the country supported the Repub-
lican ticket in the campaign, their Democratic opponents received a larger
percentage of substantial contributions from newspaper, radio, and ad-
vertising interests than did the G.O.P. Even more surprising, in view of
the fact that the former head of the Commonwealth and Southern was
the Republican standard-bearer, was the relative unimportance of con-
tributions from power companies. These interests may have given to
63 I n identifying the interests of contributors, Who's W h o i n America, Poor's
Register of Directors of Corporations, and the directories and telephone books of
various cities were used. Under "Organized Labor" are included all contributions
from trade unions, regardless of amount. Speaking strictly, none of these is a con-
tribution of "$1,000 or more," since each includes many individual contributions.
724 THE AMERICAN POLITICAL SCIENCE REVIEW

other agencies, but their r81e in financing the Republican National Com-
mittee was insignificant.
Included among the steel manufacturers contributing to the Republican
National Committee were representatives of the following companies:
Alleghany, Bethlehem, Edgewater, Great Lakes, Inland, Laclede, Mid-
land, National, Republic, Weirton, Youngstown. Allis-Chalmers, Buckeye
Steel Castings Company, and Mesta Machine Company, manufacturers
of machine parts, were also heavily represented. Among "other" manu-
facturers were makers of automobiles, glass, paper products, paints,
rope, rubber, textiles, food products, electrical equipment, kodaks, adding
machines, radios, fountain pens, soap, and toothpaste. The Monsanto
Chemical Company and Eli Lilly, as well as the du Pont interests, were
represented among the chemical manufacturers. The only large concerns
represented among the contributors to the Democratic National Com-
mittee were the American Locomotive Company, the American Car and
Foundry Company, and the International Business Machines Corpora-
tion.
The records show one interesting instance in which an officeholder in
the Democratic administration contributed to the Republican National
Committee. Secretary of the Navy Frank Knox, appointed to the cabinet
as a Republican, contributed $1,000 to that party.
The Democratic National Committee ended the 1940 campaign with an
indebtedness of $423,062. Of this, $77,500 represented money borrowed
from various individuals in amounts of $5,000 or less; unpaid bills, chiefly
for radio broadcasting, made up the balance. There was no substantial
reduction in this indebtedness in the next two months, but on February
28, 1941, the committee had a balance of $99,000, reducing the net in-
debtedness to about $314,000-substantially less than the $440,000 net
deficit of four years before.
The Republican National Committee faces the next four years in a
much healthier financial state than after the 1936 campaign. Although its
unpaid bills totaled $345,000 on October 31, 1940, all of these were paid
before the end of the year, and Mr. Goodspeed, the retiring treasurer, was
in the enviable position of being able to turn over to his successor a sol-
vent o r g a n i z a t i ~ n . ~ ~
I t is usually dangerous to condemn a legislative enactment on the basis
of limited experience. Nevertheless, in this writer's judgment, the cam-
paign of 1940 offers convincing evidence that the present Hatch Act, in
so far as it attempts to regulate campaign funds, is ambiguous, unwork-
able, and conducive to unhealthy political practices. Similar conclusions
were reached by the Gillette CommitteeB1and the Special Assistant to the
'0 Letter from Mr. Goodspeed, dated Apr. 8, 1941, in reply to a specific query

from the writer. 61 R e p o ~ t ,p. 80.

 AMERICAN GOVERNMENT AND POLITICS 725

Attorney GeneraLs2Mr. Milligan's carefully guarded, but explicit, state-

ment on this point is well worth quoting in full: "We respectfully submit
that in our opinion the present existing federal laws relative to contribu-
tions and expenditures of political parties are fatally defective in accom-
plishing the purpose intended by Congress and are, in our opinion, un-
enforceable under the conditions which have been presented in this in-
vestigati~n."~~
If it was the intent of the framers of the Hatch Act to limit to $3,000,000
the aggregate contributions and expenditures of a political party, they
failed to achieve that purpose. Expenditures on behalf of the Democratic
party were almost double that amount, and the Republicans spent close
to five times that sum.64The Special Assistant to the Attorney General
characterized the expenditures as "excessive"; the Gillette Committee
used the adjective "enormous." As both investigations point out, much
of this expenditure was made deliberately in a manner to circumvent
the spirit without violating the letter of the act. The real effect of the
$3,000,000 limitation, so far as the Republicans were concerned, was an
unfortunate decentralization of the collection and distribution of funds.
Independent political committees and finance committees, each claiming
the right to spend that amount, sprang up like mushrooms all over the
country. In the early part of the campaign, the Democrats conformed to
the spirit as well as to the letter of the act; but, faced with the possibility
of being forced to abandon what they considered an essential last-minute
radio campaign, they farmed out their contracts to various state com-
mittees with the assurance that the bills would be met by loans from a
fairy godfather. Although no violation of the letter of the law was in-
volved in these transactions, they certainly contravened its purpose. The
effect of limitations which result in such devious practices is unhealthy
rather than salutary.
The $5,000 limitation upon individual contributions was equally in-
effective. As Mr. Milligan points out, the provision is nullified in the very
act itself by the exceptions granted in the case of contributions to state
and local political committees. The limitation probably had a certain
nuisance value, and it may have made wealthy contributors more circum-
spect about the aggregate total of their gifts, as well as the organizations
to which they were given, but if the framers of the act hoped to limit to
$5,000 the financial stake which any one individual had in a political
campaign, they failed miserably.
The one provision of the Hatch Act which seems to have been entirely
effective was the section directed a t the famous-or infamous-Demo-
cratic Book. This result may have been commendable, but it is hardly a
62 Mimeographed report dated Feb. 26, 1941.

6a Ibid., p. 11. 64 See Table V above.

726 THE AMERICAN POLITICAL SCIENCE RTVIEW

notable advance in the elimination of nefarious practices in the collection

and distribution of campaign funds.
Granting that the Hatch Act failed in its major objectives, what
then? Speaking broadly, there would seem to be three alternatives: (1)
strengthen the act; (2) repeal the provisions and return to the status quo
ante; or (3) repeal the provisions and substitute other types of regulation.
The Gillette Committee suggested the desirability of "exploration and
study" of remedial legislation designed, among other things, to make the
limitations of the Hatch Act e f f e c t i ~ e .The
~ ~ Special Assistant to the
Attorney General recommended remedial legislation, admirably specific
in character. His report proposed to make the $3,000,000 limitation effec-
tive by broadening Section 21 to prohibit any committee, other than the
regular national party committee, from expending any funds whatever on
behalf of the national party candidates, after the nominations are made,
except with the written permission or consent of the regular national party
c ~ m m i t t e e .This
~ ~ drastic centralization of financial control was to be
accompanied by a clarification of the definition of "political committee."
The problem of limiting the size of individual contributions was to be met
by repealing Section 13 and substituting provisions "limiting the aggregate
contributions any individual may make during one calendar year for
political purposes."67 The suggestion was added that the present $5,000
limit might be unnecessarily low for aggregate individual contribution^.^^
Experience with the Hatch Act, and Mr. Milligan's recommendations,
raise an important issue which should be faced squarely. The existing
limitations do not limit and have resulted in numerous circumventions of
the law. If we are to have limitations that really limit, we must centralize
the control of campaign funds in the hands of the national committee to
an extent which would give pause to many a member of Congress who
somewhat blithely voted for the Hatch Act in July, 1940. Limitations
cannot be effective unless we are willing to take such action. This writer is
inclined to doubt whether the adoption of Mr. Milligan's recommenda-
tions, carefully phrased as they are, would stop up all the gaps. When is
money spent "on behalf of a candidate for President"? Would funds spent
by state and local committees on behalf of the party ticket, state as well
as national, be included? And if not, would not the limitation be rendered
ineffective by expanding the activities of these committees? Would it not
be possible to defeat the $5,000 limitation upon individual contributions
by hanging gifts on more branches of one's family tree, or even one's
business tree? The adoption of Mr. hlilligan's recommendations would
stop up many gaps in the Hatch Act, but, in the opinion of this writer, all
of them cannot be plugged unless we are willing to take the drastic step
of making all state and local committees subsidiaries of the national com-
66 Report, p. 80. c6 Mimeographed report, p. 5.

67 Zbid., p. 8. Zbid., p. 9.

 AMERICAN GOVERNMENT AND POLITICS 727

mittees and subject to complete financial control from that quarter. As

long as any gaps remain, subterfuge will be resorted to, making it difficult
if not impossible to assemble the information which is essential to any
effective publicity regarding the financing of the campaign.
It has long been the conviction of the writer that the question whether
a party has spent "too much" should be settled in courts of public opinion
rather than in courts of law. It does not follow, however, that our present
course should be a return to the status quo ante. Instead, we should adopt a
constructive program laying more emphasis upon publicity and less upon
p r o h i b i t i ~ n If
. ~ ~the ineffectiveness of the Hatch Act limitations in the
1940 campaign should lead to such a redirection of our attack upon the
problem of money in elections, the act would have served a highly useful
purpose.
LOUISEOVERACKER.
Wellesley College.

Public Ownership and Tax Replacement by the T.V.A. The state and
county governments in the Tennessee Valley area, particularly in Ten-
nessee, completed 1940 with one of their most pressing financial problems
solved or well on the way to solution. The threatened loss of taxes t o
governmental units, resulting from the program of public ownership of
power and the purchase by the Tennessee Valley Authority and the
municipalities of the properties of private electrical power companies,'
had been serious to many counties facing bankruptcy, curtailment of
services, or exorbitant taxes. Besides the financial effects, the situation
strikingly demonstrated the need for reforms in local government, mainly
the consolidation of counties and the introduction of better budgeting and
accounting practices. Moreover, the problem has also been significant
because of certain issues resulting from the venture into public ownership.
Should proprietary agencies of the national government engaged in com-
petition with private business and acquiring existing taxable facilities be
responsible for the taxes thereby displaced and replace them as a matter
of policy? Are proprietary functions of the national government subject
to state and local taxing authority? These issues have demanded wide-
spread consideration not only in the Tennessee Valley area but also in
other sections where public power programs are being tried on a large
scale. A bill was introduced into Congress on September 30, 1940, to
provide for payments to governmental units affected by displacement of
taxes arising from the Bonneville Power Project12and a more recent bill
6Vdoney i n Eleciions, pp. 374-404.
For the companies affected and the taxes formerly levied on the properties
purchased, see the Independent Offices Appropriation Bill for 1941, Hearings before
the Subcommittee of the Committee on Appropriations, House of Representatives,
76th Cong., 3rd Sess., Part 2, p. 1713. 54390, 76th Cong., 3rd Sess.